HITS Daily Double


Warner Music Group’s fiscal year wrapped with considerable growth in overall revenue, operating income and adjusted EBITDA. The company pulled in $5.3 billion in the 12 months ending 9/30, a 19% rise over 2020.

The revenue increase was driven by 21.9% digital-revenue growth across recorded music and music publishing to $3.54b. Digital revenue represented 66.8% of total revenue, compared to 65% the prior year. Recorded-music physical revenue of $549m increased 26.5%, artist services, expanded-rights revenue and publishing sync revenue also saw double-digit growth.

Publishing revenue increased 15.8% to $761m. Recorded-music licensing revenue and publishing mechanical revenue both increased on an as-reported basis and decreased in constant currency.

“Looking to 2022, we’re excited to release incredible new music from the world’s hottest artists and most influential songwriters,” said CEO Steve Cooper during a call with analysts. “We’re also planning innovative moves and collaborations that will strengthen our leadership position across a vast universe of opportunities in both the digital and physical worlds.”

In the records sector, digital revenue represented 68.3% of total recorded-music revenue, vs. 67.4% the prior year. U.S. recorded-music digital revenue was $1.53b, or 77.1% of total U.S. recorded-music revenue, vs. 80.3% in fiscal 2020. U.S. revenue represents 44.5% of total revenue.

Operating income was $609m, compared to an operating loss of $229m the prior year. Operating margin was 11.5%. Adjusted OIBDA increased 28.9% to $1.02b Adjusted operating income increased 34.6% to $712m.

Cooper asserted that WMG sees “substantial runway ahead” in subscription streaming and has supported NMPA efforts to set a new royalty rate with the Copyright Board. He touted the global and multi-platform success of African artist/producer CKay’s “love nwantiti (ah ah ah)” and extolled the company’s ability to realize the same margins as UMG despite being half its size.

The CEO also name-checked recent deals with David Guetta, Madonna and the estate of David Bowie, among others, stressing the company’s consistent financial discipline as it goes after acquisitions.

“We’re thoughtful about how we allocate capitol, thoughtful about structuring deals to get an appropriate return for shareholders,” Cooper noted, adding that WMG is looking at opportunities around the world to invest in and build to scale. “Most of the models we see are the traditional push/pull, where WMG pushes the music to the platform, which pushes it to the consumer. Within the large-scale metaverse platforms like Fortnite, we will begin to see an opportunity where content and distribution intersect.”

In WMG’s fiscal Q4, revenue was up 22.2% to $1.17b. The increase was driven by digital-revenue growth of 19% across recorded music and music publishing. WMG's stock rose to $42.74 during the quarter, up from $36.04 at the start on 7/1.